October continues to be a haven for all crypto investors, and now Ethereum has entered the game as well. With the deployment of dApps and different DeFi protocols, Ethereum has reached an all-time high of $4,150 as of October 21st. Let’s see how NFTs and positive predictions from big investors like JP Morgan could potentially sky-rocket ETH to over $15,000.
The Ethereum price had fallen by over 50% in spring as most cryptocurrencies took a big hit. The coin was trading as low as $1700 in July after falling from $4000+ thanks to China’s crypto ban. But since then, Ethereum along with the other big players in the crypto market has recovered exponentially.
Ethereum was trading at around $3000 at the start of the month and is now worth over $4,100. That is a rise of 35% in under a month and an increase of over 400% since the start of the year. But what has caused the price to increase so dramatically?
Reducing Supply of Ethereum
The supply of Ethereum has been falling for a while, but this is a big positive for Ethereum. Ever since a new upgrade in August, the Ethereum blockchain has been burning ETH at an exponential rate. This is ETH’s way of transferring from using the Proof of Work (PoW) to the Proof of Stake (PoS) protocol. For a long time, Ethereum’s kryptonite has been its substantially high gas fees, scalability issues and high withdrawal prices. The new update, known as ETH 2.0, is expected to fix all these issues and more. Many coins such as Polygon’s MATIC, which operates as a scaling solution to ETH on the same network, may face issues down the line.
“Ether balance on exchanges is at a 2-year low. This factor and the expiration of ETH calls has been the driving force behind ETH’s recent surge”, says Igneus Terrenus, the head of communications of Bybit crypto exchange. In fact, ‘The Altair Beacon chain upgrade’, which is the first of many Ethereum upgrade’s to transition into PoS protocol is expected to take place on October 27th. This may further push the price of Ethereum in the short term.
The August upgrade which introduced coin burning has significantly reduced the number of ETH available. According to etherchain.org, roughly 526,000 coins have been burned in the last few months. This is equivalent to roughly $2.1 billion. On September 3rd, there were more ether coins burned than created for the first time, and this number has only increased since October, which has caused a huge increase in the number of transactions in Ethereum.
NFTs or Non-Fungible Tokens have been another popular digital asset. The popularity has grown in the last 12 months, and if this trend continues, Ethereum will continue to grow side by side. This has to do with the deployment of smart contracts on the platform. Smart contracts on the ether blockchain have allowed developers to build DeFi protocols as well as dApps on the blockchain. NFTs have arguably been one of the most popular applications that have been introduced on the platform. Since major NFT exchanges use ETH, and users interested in buying NFTs can only buy them with Eth, the cryptocurrency has enjoyed a significant amount of traction. While other smart contracts on cryptos like Cardano’s ADA have been deployed, Ethereum is the undisputed kind of smart contracts in the crypto space.
But will the ETH 2.0 development and upgrade be as successful as it is expected to be?
Problems with ETH 2.0 staking platforms
Since last December, Ethereum has started transitioning into Ethereum 2.0 to follow the PoS algorithm. But, it hasn’t been smooth sailing for the second-largest cryptocurrency in the world. Dmitri Tsumak, the founder of StakeWise, one of the Ethereum 2.0 staking pools, identified a big problem earlier this month.
Taking to Twitter in the first week of October, the StakeWise handle had the following to say:
This problem could have resulted in the investor’s ETH being stolen if it was not identified beforehand. In fact, Lido said that a potential loss worth of 100 ETH, or over $400,000 worth of Ethereum could have been affected. This led to the delay of a new upgrade. So it goes to show the vulnerabilities and problems that we may face in the coming years with the new Ethereum 2.0 protocol. If not handled, it can get out of hand since post-deployment, Eth 2.0 will attract millions of users at a rapid rate.
Does BTC Pull The Other Alt-coins?
Another factor that actually may work in Ethereum’s favour is its tough competition with Bitcoin. Forkast.News reported that the Ethereum price increase was not surprising at all, given that it tends to follow BTC. This suggests that most of the alt-coin movement depends on the performance of Bitcoin. While this may be true, Ethereum has lately been of more interest to some giants in the game. One of these giants is JP Morgan, which believes Ethereum is the backbone of the cryptocurrency economy. “To the extent of owning a share of this (Ether’s) potential activity is more valuable, the theory goes, ether should outperform bitcoin over the long run. JP Morgan is widely regarded as one of the most successful investors of all time.
Ethereum To Reach $50,000?
Coincodex believes that while ether may correct in the coming weeks, the coin is overall bullish for Q4. According to their website, Ethereum is likely to correct to $3,600 by the start of November. But the market sentiment remains bullish, with 19 of the last 30 day’s trading in green.
Finder UK has a bit more of an optimistic price target for the second-largest cryptocurrency. Finder.com’s panel which consists of more than 50 fintech specialists believe that the cryptocurrency will trade a little above $5,100 by the end of the year. While some specialists think a $10,000 price tag is more apt.
Three panellists —CEO of Cake DeFi Julian Hosp, head of blockchain at Realfevr Pedro Febrero and co-founder of Origin Protocol Joshua Fraser — are bullish on ETH’s potential this year, each predicting the coin will close out the year at a value of $10,000.
The culmination of 50 panellists also expects the cryptocurrency to reach $15,000 by 2025 and a mammoth $50,000 by 2030, which would be more than a 12X increase. But remember, this is not financial advice. Cryptocurrencies exist in a very volatile market with new highs and lows both equally possible. Remember, to only invest what you can afford to lose.
The panellists also shared their opinions on the other DeFi focused protocols like Solana and ADA. While they do not think that Ethereum can be replaced by the other alt-coins, the panellists think that Ethereum could lose up to 30% of its market share thanks to its competition. Ethereum remains the second-largest cryptocurrency with a total market cap of almost $500 billion. One Ethereum is trading at $4,150 as of October 26th.